2020 Annual Report
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V2 Dignity_AR_2020_Cover_BP_V1 tp 2.qxp_Layout 1 16/04/2021 13:33 Page 1 Dignity plc Annual Report & Accounts 2020 Dignity plc 4 King Edwards Court ANNUAL REPORT 2020 King Edwards Square Sutton Coldfield Dignity plc Annual Report & Accounts West Midlands B73 6AP www.dignityplc.co.uk Responsible and resilient through challenging and changing times V2 Dignity_AR_2020_Cover_BP_V1 tp 2.qxp_Layout 1 16/04/2021 13:33 Page 2 IFC Dignity plc Annual Report & Accounts 2020 Who we are We are one of the UK's major funeral related service providers and the only publicly listed company in the UK operating in the funeral sector. The Group's main activities are funeral services, crematoria and pre-arranged funeral plans. Our aim is to be at the forefront of the sector in terms of quality, transparency, standards, choice and value-for-money. Inside this year’s Annual Report Strategic Report Financial Statements Transparent reporting 01 At a glance Group Accounts We aim to report in a transparent and 04 Executive Chairman’s review 84 Independent auditors’ report to the members integrated way to clearly reflect how we 15 Key performance indicators of Dignity plc operate. Within this year’s report we have 18 Operating review 92 Consolidated income statement also sought to address the additional 22 Financial review 92 Consolidated statement of comprehensive requirements arising from Section 172 27 Principal risks and uncertainties income 33 Viability statement 93 Consolidated balance sheet of the Companies Act 2006 and the 2018 34 Non-financial information statement 94 Consolidated statement of changes in equity UK Corporate Governance Code. 35 Corporate and social responsibility 95 Consolidated statement of cash flows 42 Section 172 Statement 96 Notes to the financial statements This Annual Report & Accounts contains forward-looking statements with respect Governance Company Accounts to the Group’s plans and its current goals 45 Chairman’s introduction to governance 144 Dignity plc Company balance sheet and expectations relating to its future 50 Governance structure 145 Dignity plc Company statement of changes financial condition, performance, results, 51 Board of Directors in equity strategic initiatives and objectives. 52 Operating Board 146 Notes to the Dignity plc financial statements 53 Directors’ statement on corporate governance 154 Financial record 58 Audit Committee report 62 Nomination Committee report Other Information 63 Report on Directors’ remuneration 81 Directors’ report 156 Alternative performance measures 162 Shareholder information 163 Contact details and advisers 164 Financial calendar Consultancy, Design & Production by Bexon Woodhouse www.bexonwoodhouse.com Printed in the UK by CPI Colour, a certified CarbonNeutral® printing company, using vegetable based inks and water based sealants. The printer and paper manufacturing mill are both certified with ISO 14001 Environmental Management systems standards and both are Forest Stewardship Council® (FSC ®) certified. V3 Dignity_AR_Master_Template_2020 tp.qxp_Layout 1 16/04/2021 14:33 Page 4 Dignity plc Annual Report & Accounts 2020 01 At a glance Strategic report A caring and responsible business What we are here for and our role We are a caring and responsible business. At its heart is a core social purpose to help people at one of the most difficult times in their lives. It is through the ongoing dedication of our people, our commitment to responsible business practice, and by making a meaningful contribution to society, that we will ensure we fulfil both our purpose and our potential. A core social purpose vital frontline role & As one of the funeral industry leaders, we have played our part during the evolving and unprecedented COVID-19 pandemic. We have worked closely with the Government and wider funeral sector to ensure that we deliver the services that are needed. By managing our business proactively, we have been able to respond, prioritise and adapt with pace and agility to these extraordinary circumstances – for our clients, colleagues and those who use our facilities. V3 Dignity_AR_Master_Template_2020 tp.qxp_Layout 1 16/04/2021 14:33 Page 5 02 Dignity plc Annual Report & Accounts 2020 At a glance continued Strategic report A strong, resilient and sustainable business Our distinctive qualities and strengths Our Services Funeral services (2019: 69,400) We are a major provider of funeral services 80,300 in the UK and we strive to set the highest Number of funerals conducted during 2020. standards of service and care. Dignity Funerals provides the bereaved with access to our national network of funeral 795 (2019: 820) directors, where families can arrange a service Number of funeral locations we operate personal to their needs. in the UK. Simplicity Cremations offers less traditional, lower cost direct cremation options and smaller, family-led services, whilst benefiting from 4,900 (2019: 2,700) Dignity’s high standards of care and a national infrastructure of mortuaries and crematoria. Of the 80,300 funerals conducted 4,900 relate to Simplicity and branch direct cremation based services delivered in 2020. Crematoria (2019: 64,800) The Crematorium and Memorial Group 74,500 (‘CMG’) is the largest single independent Number of cremations conducted operator of crematoria in Britain with a during 2020. significant portfolio of well-established and Our Strengths state-of-the-art facilities that meet the needs of the local communities we serve. • Leading the way for quality of 46 (2019: 46) client care, facilities and standards. Our crematoria provide a range of cremation services, from basic unattended cremations to Number of crematoria we operate in England and Scotland. • Strong brands and compelling traditional full services. client propositions, offering greater Our extensive, peaceful grounds allow families to choice and flexibility. remember their loved ones in a very personal way. • Leading position in the pre-arranged funeral market. • Focused on delivering excellent Pre-arranged funerals 558,000 (2019: 523,000) client service, and positive We are one of the UK’s largest providers engagement and experience. of pre-arranged funerals. Number of active pre-arranged funerals as at 25 December 2020. • Unique in our service capabilities Our pre-need business allows clients to pre-arrange their funeral through our national as a funeral director, a crematoria network of funeral locations and established operator and as a pre-arranged relationships with many affinity partners. funeral plan provider. • The only provider with a national network of funeral locations and crematoria. • Leading position in the direct Our People, Culture and Values cremation market. Professionalism, resilience, respect and compassion has been • An experienced team and vital in the face of the unprecedented challenges and change Operating Board. during 2020. We have sought to ensure that our people and • Committed to delivering a the bereaved families we serve across the UK have been progressive, innovative and protected and supported during this time. increasingly more digital-led Our colleagues across the business have worked flexibly and service for clients. determinedly to deliver services to the highest standards and with the care and commitment they always do. V3 Dignity_AR_Master_Template_2020 tp.qxp_Layout 1 16/04/2021 14:33 Page 6 Dignity plc Annual Report & Accounts 2020 03 Generating sustainable financial and non-financial value Our Stakeholders Summary 2020 Challenge and Sustainability and Opportunity Engaging with a range of stakeholders informs our Our business and people have truly been tested by decision-making, builds trust and is key to delivering the challenging events of 2020. Our response has our strategy in the long-term. demonstrated the strength and resilience of our business, the dedication of our people in whichever role Our stakeholders include our clients, both our Pre-Need they play, and ultimately reaffirmed our commitment Funeral Plan holders and the Trustees of the related to our core social purpose. Funeral Plan Trusts, communities, colleagues, investors, suppliers, pensioners and trustees of our pension funds, We have an opportunity to reposition the business and policymakers. For our business to succeed we need along with a clear sustainable growth plan: to maintain strong relationships and open engagement • The final outcome and conclusions of the CMA with them all. investigation is now determined; We must dedicate time to understand their individual • Our preparations for regulation of the funeral plan needs, expectations and aspirations, as meeting or market by the FCA are progressing; exceeding them is an essential part of the way we create and deliver sustainable value. • Our root and branch review is scheduled to conclude in the second quarter of 2021; and Sustainability is about the actions we take to fulfil our purpose and our potential. We remain committed to • We are long-term advocates of improving standards, driving a sustainable business that is both socially and quality, transparency, and providing greater choice in environmentally responsible and commercially the funeral sector. successful. We are determined to grow both funeral and cremation market share on a sustainable organic basis whilst safeguarding our future success for the benefit of all our stakeholders. Summary Group Financial Performance 2020 Underlying revenue(1) Operating profit Underlying operating profit £314.1m £15.9m £55.7m (2019: £301.3m) (2019: £44.8m) (2019: £63.3m) Dividends paid in the period Basic (loss)/earnings